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Man lays family’s claim to oil shale

A Grand Junction man says his family’s oil shale claims covering thousands of acres in northwest Colorado are valid and an analysis by the Center of the American West at the University of Colorado at Boulder says he might have a point.

The Bureau of Land Management says the odds are against that, but that it’s likely something courts would have to decide.

Researchers at the Center of the American West at CU began looking last year into the claims held by the Smalley Creek Oil Shale Co. out of Collbran, where Jerry Reed’s great-grandfather Clarence Surrey lived.

The Smalley Creek claims, however, no longer exist and the land to which they applied now are owned by the federal government and administered by the BLM.

“I think they were illegally taken” by the U.S. Department of the Interior, Reed said.

“The most plausible — although still highly unlikely — scenario in which the Reed family has a valid case today hangs on the possibility that the federal government improperly relocated the claim while the original claimants were still performing annual maintenance or had demonstrated their intention to resume it,” researchers Ryan Rebhan and Jason Hanson wrote in their paper, “So You Think You’ve Got An Oil Shale Claim.”

To be sure, Rebhan and Hanson noted, the Interior Department likely was acting within its rights in relocating the claim and placing it under the government’s leasing authority.

That doesn’t mean that the Smalley Creek holdings couldn’t be valid, however.

The claims date back to before the 1920 Mineral Leasing Act became law. Claims that precede 1920 could be patented or held by the owners of a private property.

A patented claim can be used by the owner for any purpose, just like any other real estate.

Reed could have lots of company. More than 35,000 oil shale claims were made between 1915 and 1920. About 10,000 claims were made in Colorado and more than double that amount, 25,000, were made in Utah, where oil shale outcrops are easily seen.

His family had claims covering 60,000 acres, Reed said.

Labor requirement

The Green River Formation in Colorado, Utah and Wyoming contains the world’s richest oil shale deposits and the federal government controls 70 percent of the land that overlays it.

The likelihood in the case of Smalley Creek Oil Shale Co. and Reed is that the company failed to meet the annual work requirements of the General Mining Act of 1872 and that the Interior Department placed it under the federal leasing authority in the 1930s.

Reed, 50, however, said he recalls going to the BLM offices routinely in the 1970s to deal with the family claims.

As for whether the claims are valid, Reed said many are patented, meaning that once the deed, or patents, were issued, there is no longer an assessment or annual labor requirement of $100.

Surface rock

Rebhan and Hanson see it slightly differently, concluding that if the family did the annual labor, or resumed work after a lapse but before relocation, those are the important issues.

“If the answer is yes to either of these questions, then the family may have a case against the Department of Interior,” Rebhan and Hanson conclude.

It’s true, as well, that the legal history of oil shale is convoluted and confusing.

“I had actually been to some of the legal swamp of oil shale claims” when he learned of Reed’s claims, said Rebhan, a native of Rifle, near the heart of the Colorado oil shale deposit.

Reed’s claims are mostly placer claims, meaning that they would apply to rock visible on the surface and so they’re unlikely to get to the deepest — and richest — deposits in Rio Blanco County, said Glenn Vawter, executive director of the National Oil Shale Association.

That’s the reason that Utah claims outnumber those in Colorado. The Utah side of the deposit is shallower, with outcrops.

Reed contends his claims stretch up Piceance Creek and could very well take in some of the best lands.

There are outcrops along the eastern edge of the deposit that could lend themselves to some of the techniques now being tried in Utah on state and private lands, Vawter noted.

“There are places where you could do what Red Leaf is doing,” he said, referring to Red Leaf Resources Ecoshale process. Red Leaf digs out a shale deposit to build a capsule, complete with a heating and oil recovery system, then replaces the shale and covers it. As the shale is heated, it releases oil, which the system is to collect.

Company ownership

It’s one thing to speculate, said Colorado BLM spokesman Steven Hall, and another to prove a claim.

“It’s not uncommon to have academics offer their own points of view regarding these claims,” Hall said in a statement. “But whether or not the claims or the academics’ point of view is correct is a question best left to the courts.”

Claims such as Reed’s are not unusual, Hall noted, but “having those claims substantiated or verified is not common.”

Reed, who has spent most of his free time since 2009 delving into records in Garfield County and other locations, said he has the legal right of ownership to the Smalley Creek Oil Shale Co. lands under state and federal law.

He’s pursuing them, he said, on behalf of his family and Collbran, which once was a haven for oil shale speculation and exploration.

“I felt I was obligated,” he said. “I felt Collbran was owed something.”